With Vigour and Zeal

Author: Werner R. Kranenburg

  • Wrapping it up, 7 April 2008

    John M. Gray holds several functions at public services union UNISON and is a pension representative at the Local Government Pension Scheme (LGPS). In addition, he keeps John’s Labour blog, on political and trade union issues. Bearing that in mind, to read his account of a Trades Union Congress seminar on class actions and plaintiffs’ lawyers in the UK see his post Class Action at the TUC.

    Also of interest, an article by Barlow Lyde & Gilbert LLP (first published in The Banker) elaborating on the UK claimant situation following the ‘credit crunch’ after a brief comparison with the US.

    And one off the shelf is a January article in The Lawyer, on Proskauer Rose LLP‘s 2008 Trends and Developments report. (press release) One of the trends in the report is ‘[t]he continued (albeit lamented) “Americanization” of non-US legal systems’ (from page 11). (Subscribe to WV&Z.)

  • What when where: US Chamber, updated

    Henry M. Paulson Jr., Secretary of the Treasury was a last-minute addition to the roster of speakers last week at the US Chamber’s Capital Markets Competitiveness conference. (See previous post.)

    Transcripts of most of the speeches, including Paulson’s, are available from the Chamber’s Center for Capital Markets Competitiveness section. The conference was webcast live and once the archive is ready, it will become available again (here). And finally, another report was launched on the day, with the same title as this year’s conference, namely Strengthening U.S. Capital Markets – A Challenge for All Americans.

  • BP Plc settles US derivative action

    BP Plc (LSE, NYSE: BP) has settled the derivative litigation pending against it. (3AN-06-11929CI, Unite Here National Retirement Fund et al vs. The Lord John Browne of Madingley et al; See WV&Z’s archive for previous posts). The notice of and terms of the settlement and more documents relating to the action can be found in BP’s Corporate Governance section and Lead Counsel Coughlin Stoia Geller Rudman & Robbins LLP‘s settled cases section.

    The action has not satisfactorily established that English corporations can be sued derivately in a US Court under the English Companies Act 2006, which allows for derivative claims. Instead, the Court had denied BP’s motion to dismiss on the grounds that Alaska law is applicable and that the case should not be dismissed on the basis of forum non conveniens.

    The Court is to hold the settlement fairness hearing on 7 May 2008 at 2pm. The deadline to object to the settlement is 23 April. (Subscribe to WV&Z here.)

  • Who’s who in UK litigation funding

    This week’s Legal Week has an extensive overview of the players, law firms and funding specialists alike, in the UK litigation funding market. At least one is missing though, namely accountancy firm Smith & Williamson, which had set up its funding practice in September last year.

    From the article: “The dramatic adoption of the once-controversial technique illustrates the fast-changing attitudes as London litigators position themselves for an expected upturn in group claims and litigation in general.”

    It quotes Skadden, Arps, Slate, Meagher & Flom LLP‘s Paul Mitchard, head of Skadden’s European International Arbitration Group thus: “Funding is definitely here to stay. It is a significant development in dispute resolution, where litigation and arbitration are now being viewed as a commercial venture for outside funders for the first time.”

    Then yesterday’s FT Weekend chipped in too, with a writing of a far more general nature. If this was London buses, the wait would be for the third piece around the corner…

    So just in case, to make up for it if there isn’t one, one off the WV&Z shelf then from over a year ago, a profile of ‘trailblazer’ and founder of IM Litigation Funding, Toby Duthie. (FT) (Note, another IMLF founder of higher profile, Susan Dunn, has left that company late last year to join fellow funder MKM Longboat Capital Advisors LLP. (The Times, The Times))

    What when where: Next week the US Chamber of Commerce Center for Capital Markets Competitiveness is to hold the second installment of its Annual Capital Markets Summit (26 March 2008, Washington DC). This year’s focus is on ‘Strengthening U.S. Capital Markets for All Americans’. (programme) Two topics of the day will be securities litigation reform and the state of regulation, which, given the events of the past week or so, should be very interesting indeed. Not a single speaker from the plaintiffs’ bar, mind.

  • Shell adds US to reserves settlement

    In the continuing saga that is the Shell Settlement (see the WV&Z archive for previous posts), the latest development came last week with the company’s settlement with US investors. (Royal Dutch Shell Plc: Euronext, LSE, NYSE: RDSA, RDSB; Shell press release, The 10b-5 Daily)

    The US settlement covers all purchasers of Shell shares on US markets during the Class Period and US residents, citizens and entities who purchased Shell shares on non-US markets during that period. The settlement amount is US$79.9 million plus US$2.95 million, plus interest, plus an additional US$35 million split between the US settlors and non-US settlors. (What isn’t in the press release is the exact amount Shell pays in fees to Lead Counsel Bernstein Liebhard & Lifshitz LLP: US$27 million (Court memo).) The non-US settlement is pending before the Amsterdam Court of Appeals.

    Taking a step back however, behind the settlement news was the required preceding development of having to rid the US action of the non-US claimants, which had already established their own settlement last year, in order for the Stateside plaintiffs to be able to enter into their own settlement without them. That occured by way of final order of the New Jersey District Court on 5 December 2007, dismissing the claims of non-US investors from the action with prejudice for lack of subject matter jurisdiction.

  • What when where: active activist engagement

    There are three coming events, due to take place this week and in the coming months, that are interesting to note here.

    The first is the third installment of Schiffrin Barroway Topaz & Kessler LLP‘s annual Rights & Responsibilities of Institutional Investors conference on Thursday this week in Amsterdam. (This event is actually reportedly overbooked already.) This year’s keynote speaker is the seventh Secretary-General of the United Nations, Kofi A. Annan.

    Among the other speakers are Elad Man of Man-Barak Advocates & Solicitors and Stefan Winheller of Winheller Rechtsanwälte, on the topic of international collective and class actions. (Both firms are in an alliance with Schiffrin Barroway.) Other topics of the day under the general theme of corporate governance will be the Vivendi Universal SA case and sovereign wealth funds. Interestingly, most speakers are corporate governance advisors or counsel with investment firms or are otherwise non-legal professionals on the ‘buy-side’ of legal services.

    The second event of note is C5’s aptly-named Conference on Securities Litigation, taking place on Monday 28 and Tuesday 29 April (and a workshop Wednesday 30) at the Millennium Knightsbridge Hotel, London. Lots of friends of WV&Z and recognisable names appear on the speakers list. A selection, in no particular order:

    Myths surrounding UK and European class actions, managing risk and D&O liability, KapMuG, the extra-territorial reach of the US and the subprime fallout are all on the menu. (programme)

    And finally, a bit further away in May, is Grant & Eisenhofer PA‘s Global Shareholder Activism Conference (May 15-16, Hotel Prince de Galles, Paris). Its three keynote speakers are former Senator Paul S. Sarbanes (D-MD), Delaware Supreme Court Chief Justice Myron T. Steele and Jürgen Maruhn, Presiding Judge of the Oberlandesgericht Frankfurt am Main. Like the Schiffrin Barroway conference and unlike C5’s, the emphasis is on buy-side and even more so on academic speakers.

    Werner says: after a three-month hiatus, it’s good to be back.

  • What when where: pension funds’ activism

    Wednesday this week, 12 December, London’s Lawrence Graham LLP hosts a morning seminar at its office on shareholder activism and securities class actions in association with Kaplan Fox & Kilsheimer LLP of New York. (Thanks to Securities Litigation Watch‘s Adam Savett for sending this in.)

    Samuel Issacharoff, Professor of Constitutional Law at NYU School of Law, speaks about ‘[w]hy class action [sic] exists in the US and how UK shareholders can take part’. The programme ends with presentations on ‘Companies Act 2006 opportunities’ and why pension funds ‘should get involved’. (programme and registration form)

  • Woes in US forewarn of ‘f-cubed Americana’

    (Subscribe) How long will it take for a US pension fund to be appointed lead plaintiff against a US company in a euro-class action? That was the question that came to mind reading an article in the Wall Street Journal today, entitled Adding to Woes of U.S. Stocks, Pension Funds Are Pulling Back. The article details US pension funds offloading billions of dollars in US equities in favour of investing outside the US.

    From the article: “Among the funds that are part of this trend: the New York State Teachers’ Retirement System, the New York State Common Retirement Fund, the Teacher Retirement System of Texas and the Florida Retirement System Pension Plan. Collectively, these plans control more than $500 billion in assets.”

    California Public Employees’ Retirement System (Calpers, US$250 billion in assets) may “reduce its U.S. stock position to 24%, from 40% of its portfolio, which would represent the fund’s lowest allocation to U.S. stocks in more than 20 years. […] The New York State Teachers’ Retirement System, with $100 billion in assets, also disclosed plans to cut its target rate for U.S. stocks to 46% from 51%.”

    Follow all that money (and experience of the US legal system) and add two elements to the mix, namely the emergence of class action legislation across the EU and the increase in the number of US listings on EU exchanges. Cases are being added to the ‘f-cubed’ list, ‘foreigners’ (i.e. non-US entities) suing fellow foreigners in US fora, the reverse, a first ‘f-cubed Americana’ action might well be a logical next step. You read it here first.

  • Wrapping it up, 26 November 2007

    Two articles of interest of today, in FTfm, the weekly Financial Times fund management insert, and this week’s The Lawyer.

    The Lawyer reports that Coughlin Stoia Geller Rudman & Robbins LLP, which currently counts 30 UK pension funds among its clients, aims to treble this number over the next 12 months. (Note, no word on a UK office or striking up alliances, just the intent on acquiring more clients.) It mentions the case against GlaxoSmithKline, in which Coughlin client Avon was appointed lead plaintiff (see last previous post on the case).

    It was of course already apparent here that Coughlin was active as counsel to UK pension funds. More recently, Coughlin client Lothian fronted the complaint against Vodafone (previous post) and late last year London Pension Fund Authority joined a US client of the firm in the derivative action against BP (first previous post of several on that case, which since has been dismissed; the opinion will be discussed in a future post).

    The FTfm article discusses the use of the US class action by European investors. It quotes, among others, RiskMetrics Group‘s Adam Savett (of Securities Litigation Watch), René Maatman of Dutch pension fund ABP and Association of British Insurers‘ Michael McKersie. A quote:

    “US judges seem prone to assume superiority on the uncertain presumption that EU courts will recognise US class action judgments or settlements,” says [Allen & Overy LLP‘s Tim] House, who doubts that they will.

  • Write-offs anew ring up In re Vodafone 2

    In March 2005, England-based Vodafone Group Plc (LSE, NYSE: VOD) settled the US securities class action pending against it by creating a US$24.5 million (then £14.1 million) settlement fund. (settlement notice) The respective class of plaintiffs was defined as purchasers of Vodafone’s American Depository Shares, limiting the class to US investors only.

    Non-US investors may however still receive a share of a Vodafone settlement, albeit not out of that fund. This month a new action has been filed against the company, again in New York and again on the basis of ‘impairment of goodwill’, on behalf of ‘all persons who purchased the publicly traded securities’ regardless of location. (complaint)

    It’s potentially another f-cubed in the making: The plaintiff is the Lothian Pension Fund, administered by Scotland’s City of Edinburgh Council. Its counsel is familiar with Vodafone and the previous action: Samuel H. Rudman’s old firm, Milberg Weiss Bershad & Schulman LLP (as it was at the time of the settlement), was a settling Plaintiff’s Co-Lead Counsel and he signed this complaint for his current firm, Coughlin Stoia Geller Rudman & Robbins LLP.

    The class period is 10 June 2004 – 24 February 2006. The deadline to move the Court for lead plaintiff status is no later than 60 days from the date the case was filed, 9 November 2007. (Subscribe)

    What’s more: “US plaintiff firms will continue to enforce the law by way of civil actions in US courts against UK corporations on behalf of US and foreign investors, including those situated in the UK.” (article)